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Arabia-Asia: Seasoned Banker Reflects On Rekindled Trade Routes

David Eldon, the former chairman of HSBC Asia-Pacific, was seeking a more "exciting" lifestyle overseas when he first moved to Dubai in the late 1960s.

Few business leaders can match David Eldon in terms of his perspective on the growing relationships between the Middle East and Asia. With almost 45 years of experience working in these two regions, Eldon, the former chairman of HSBC Asia-Pacific, has built a long career as an advisor to many of the global players in these markets in recent times. Since retiring from the banking giant in 2005, Eldon has served as the chairman of the Dubai International Financial Centre Authority, an independent director of Noble Group and senior advisor to PricewaterhouseCoopers. Although he now lives in Hong Kong, Eldon has been a frequent traveler to the Gulf as the nonexecutive chairman of HSBC Bank Middle East since April of last year. FORBES ASIA exchanged e-mails with Eldon while he was in Europe recently.

FORBES ASIA: What made you decide to join the British Bank of the Middle East in the mid-1960s? Why did you end up spending so much of your career in the region?

Eldon: After a particularly undistinguished academic career, which I terminated at the age of 16, I joined an Australian bank in London in late 1964, basically as a filing clerk, and worked my way over the subsequent three years through the ranks of teller and on to a supervisory role. Meanwhile I took the first section of my U.K. Banking Examinations, which I passed, and set out to seek a more “exciting” lifestyle overseas. The British Bank of the Middle East popped up on my radar. The region was quite unknown and appealed to my sense of adventure. I was interviewed, accepted and joined, and three weeks later found myself in Dubai at the beginning of 1968.

In terms of trade levels between the Arab world and Asia, what trends do you see developing?

In part what is happening now is a return to the old order–for better or for worse. The old trading routes (between the Middle East and Asia) are slowly being revived, but there has been a long period of recent history that saw the old ties broken, and now new ones have to be forged. While the Western powers have become somewhat wary of the rise of the Middle and Far East–in some cases with full justification, but not so in others–and as the West has become less welcoming, the old ties are being rekindled. It may be a slow process, but we had better get used to it, and we should aim to work together to achieve some sort of global harmony.

What do you think needs to be done to help strengthen trade links between the Middle East and other regions?

Trade links are being strengthened, but they are trending east and south, away from the West. The new order, geographically, encompasses South America, Africa, Asia and the Middle East (SAAAME). These are the regions where the demographics are largely more appealing than in the West.

Is the Middle East making progress in weaning itself away from its dependency on oil?

There are two issues here. You have the finite reserves of oil–even though some countries have a good many years to go before their reserves are depleted–and then you have technology being brought to bear on alternative sources of energy. I suspect that this latter issue is one that will gain the most column inches over the course of the next ten years. Of course, if the scientists create a way to utilize solar power, the Middle East has most of that, too! Currently it seems to me that only places like Dubai have made a serious attempt to diversify away from energy as their source of revenue–partly out of necessity because theirs has largely run out, anyway.

What are the trends you see developing among Mideast sovereign funds? Are they starting to invest more in other Islamic countries?

Some funds–I think ADIA (Abu Dhabi Investment Authority) may be one of them–seem to be focusing on regional investment rather than Western investment as in the past, partly because they have got their fingers burnt. Some funds are looking to favor investments in other Islamic countries, but Eastern ones, such as Malaysia and Indonesia, which with a Muslim population in excess of 225 million people cannot be ignored. But the majority are investing in resources, mainly food, thereby securing their food supplies, as well as minerals and raw materials. Exactly the same as the Chinese are doing.

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